Hacker News Reader

Comment by marssaxman | Hacker News Reader

I guess I have never really understood what the point of using a credit card is if you are not going to carry a balance. If you can actually afford to buy the thing, why would you not just buy it? What is the point of borrowing money and immediately paying it off?

To me this seems like asking for trouble. I don't trust myself to keep track of so much money moving around; it would be too easy to overspend.

View on HN

I used to think that, until I went to buy my first house and had no credit. Not bad credit, just no credit. I couldn’t get a mortgage, even though the payment would have been half what I was paying in rent, because I was financially responsible and had never needed a credit card.

Now I use a credit card as my default way to pay, and never carry a balance. I get travel rewards, and have an 800+ credit score. It’s a frustrating game we have to play in our current system.

The other replies are correct but to explain the credit “game”, using credit cards is the easiest way to get started showing banks how responsible you are about paying back credit. For large purchases which most people will need credit for, e.g. new car or house, banks want you to have a good record as a borrower.

As to the overspending issue, that is indeed a problem that many have. I think credit issuers mostly want to walk a very fine line, accepting that some really won’t be able to repay their debts while others can and simply spend more of what they can but might not if they weren’t using credit.

In the US at least, you get cashback, extended warranty, travel insurance, and better fraud protection, to name some. all of which can be had for free if you pay by credit card.

Reply on news.ycombinator.com